Shacksbury Holdings is raising on StartEngine at a $12 million valuation. This price is very high despite Shacksbury’s decent revenue performance. Beyond the company’s recently-acquired manufacturing facility and brand value from publicity, Shacksbury offers little in the way of proprietary assets with inherent value. Therefore, Shacksbury’s price rating is one of its lowest across our five dimensions of analysis.

The global cider market was estimated at $4.33 billion in 2018, with a 3.1% protected CAGR between 2019 and 2025. Researchers note that consumers increasingly prefer “heritage, quality, and innovation” in alcoholic drinks and are also partial to healthier, fruit-based beverages. Shacksbury is taking advantage of these trends. 

Shacksbury attempts to position itself within the larger “progressive adult beverages” category. However, benchmarking its performance against the specific hard cider market is a truer representation of Shacksbury’s potential. Assuming optimistically that Shacksbury can capture 5% of the global cider market, its obtainable market size hovers around $217 million. This is a relatively small market size, as reflected in Shacksbury’s relatively low market rating. 

Shacksbury Holdings was co-founded by Colin Davis (President) and David Dolginow (Vice President) in 2013. Davis previously served in a variety of roles in businesses around Vermont, including a Director of Fair Trade Recycling and the VP of Operations for American Retroworks. He holds a B.A. from Middlebury. 

Dolginow — who also holds a B.A. from Middlebury — has spent his career around farms and orchards. Before founding Shacksbury, he worked in development, marketing, and technology for Sunrise Orchards. 

The Shacksbury team also includes several other professionals with experience in business operations and the beverage industry. Overall, the Shacksbury team has garnered a slightly above average rating for its experience with Vermont business and farming, but relative lack of expertise in consumer brands.

Few alcoholic beverage companies are truly unique, and Shacksbury Holdings is no different. While the company certainly has eye-catching packaging designs and demonstrates a clear commitment to traditional Vermont cider techniques, there are hundreds of other craft breweries and alcohol brands with the same commitment to modern branding and storytelling. 

Shacksbury’s main point of differentiation is its partnerships with buzzy food and beverage brands and the publicity and awards it garners from those partnerships. The company is nimble enough to launch limited-edition runs that capitalize on partnership opportunities or the latest beverage trends — including this summer’s launch of a cider cocktail in an eight-ounce can. 

While Shacksbury has forged proprietary partnerships with Momofuku and other food and alcohol leaders, its core cider products are ultimately difficult to distinguish among a crowded market of craft beers and malt beverages. Therefore, Shacksbury’s differentiation score is its lowest. 

Shacksbury has been in operation for seven years and has grown from annual sales of $200,000 in 2015 to $2.8 million in 2019 revenue. The company is inching closer to profitability, having posted a net loss of just under $200,000 in 2019 (better than 2018’s results of -$365,000). 

While Shacksbury’s revenues are arguably low given its length of operation, the company’s year over year growth and margin increases are impressive. It’s no surprise, then, that our performance rating for Shacksbury is high. 

The alcohol industry is in a period of significant flux. Major brands are employing every strategy in the book to gain a foothold with the new millennial drinker. While the hard cider market has grown modestly in recent years, the popularity of cider is low compared to the explosive growth among hard seltzer brands. 

Shacksbury hard ciders are lauded among industry writers and seem to have generated a loyal customer base in the Northeast. But it’s not clear that Shacksbury is differentiated enough to scale as a national alcohol brand. While the company’s new production facility might significantly improve margins and allow for faster growth, it’s too soon to tell for sure. Shacksbury is undoubtedly a successful small business, but it’s not clear whether the brand will generate superior returns for investors (particularly at this price).

While the shifting winds of the alcohol industry might harm Shacksbury’s growth potential, the company could alternatively come out ahead as it continues to innovate products that resonate with consumers. The company’s strategy of generating the bulk of revenues from its core line of ciders while experimenting with limited releases and buzzy collaborations seems to be successful. A few more years of scrappy growth might position Shacksbury for acquisition. 

Major beverage brands are definitely eyeing companies similar to Shacksbury for purchase. Many craft breweries are acquired each year by corporations like Anheuser-Busch and MolsonCoors, and the industry shows no sign of slowing down. Major players realize that consumers — particularly millennials — value exactly the type of slick packaging design and local storytelling that Shacksbury is known for, and they’re willing to pay to add those brands to their portfolios. If Shacksbury continues to grow at pace, it may soon garner the interest of an acquirer, which would be great news for investors. 

Shacksbury Holdings is delivering low-calorie alcoholic drinks supplemented by authenticity and trendy partnerships to modern drinkers. It has been rewarded with significant year-over-year growth as a result. While it’s difficult to predict the long-term trend of the alcohol market right now, Shacksbury has as much of a chance as any other well-branded craft brewery to enjoy a sale. 

On the other hand, Shacksbury is raising money at a high valuation relative to its strength of proprietary assets. It’s also relatively undifferentiated among competitors when compared to other categories of early-stage companies. Many other craft breweries and cideries are selling a similar story, and Shacksbury’s industry recognition may not be meaningful in the eyes of consumers. Therefore, Shacksbury Holdings has been rated a Neutral Deal. 

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com. 

Analysis written by Katy Dolan.